I had so much I wanted to convey in my book, The Membership Economy. I packed it full of useful frameworks and snippets of best practices across over 40 organizations. Check it out if you haven't already–best $20 you'll spend!
But I ran out of room. Of course I did–how do you squeeze 13 years of research into 288 pages?
In the book, I talked about Leyla Seka of Salesforce and what she's done to build such a powerful community among the SFDC community. The SFDC example in the book is about harnessing the power of superusers, and the idea that behind every B in B2B is an H (human) who is trying to feel important and connected during the many many hours at work.
But there's more…
SaaS companies should be thinking of the transaction as the starting line, not the finish line. In other words, the most important activities come after the moment when money first changes hands. After all, that first transaction is small, compared to the potential lifetime value, and it will take months if not years to be a truly profitable customer.
Marketers should focus as much on retention as on acquisition, and building in ways that happy customers can make referrals both within their organization and beyond. They should also be thinking about additional things that customers need in order to achieve their goals, and use that insight to develop requirements for new features.
Sales needs to get away from the big game hunting mentality, left over from site-license days. They also need to makes sure they're bringing in the kind of customers who will stay for a long time. The commission needs to be based on duration, not initial transaction.
CEOs need to build a culture around long-term customer relationships, or even member relationships. Every CEO will agree that retention is important, but then at the board meeting, it's always about new logos! And the sales folks get paid way more than the Customer success guys. Why is that?
Customer Success could be the new hub at the center of the business structure, because they're the ones engaging with the customers, who understand what drives long term relationships. Designing a great onboarding process is critical. And so is understanding the warning signs that a customer is likely to cancel. Don't wait til a month before renewal to start thinking about retention. By then the customer has long-since made up his mind.
Finally, the principles of the Membership Economy apply to pricing. Too many enterprise SaaS companies don't make it easy enough for the buyers to buy. Pricing is too complicated and the expectation is that the customer has to be an expert on the company's pricing structure. That's not fair! And there's probably room for you to incorporate "free" into your model, as a trial or freemium offering, not only for awareness but also as a means of creating greater value for the exisiting customers or even as a means of building word of mouth.
I'm working on an online course to help SaaS companies think through these challenges. If you'd like to be a beta tester, please let me know.
